Even when logic and memory exist, GPUs cannot be completed without advanced packaging.
The TSMC Monopoly
TSMC is the only advanced packaging provider at scale:
- “CoWoS capacity is sold out through 2025 into 2026” — TSMC CEO C.C. Wei
- Demand exceeds capacity by 3-4x
Capacity Expansion Roadmap
- 2025: 75K wafers/month
- 2026: 95K wafers/month (+27%)
- 2027: 135K wafers/month (+42%)
Still won’t meet demand.
NVIDIA’s Capacity Lock
- 70%+ — CoWoS share locked by NVIDIA
- ~100% — CoWoS-L (Large) for Blackwell
- Scraps remain for competitors
Why CoWoS Is Critical
- Enables GPU + HBM integration on single package
- Silicon interposer provides 10x wiring density vs organic
- Without CoWoS, chips are built but cannot be finished
- TSMC is the only provider at scale for advanced AI chips
Supply Chain Response
- TSMC Outsourcing (2026): Packaging to ASE Technology, Amkor
- SK Hynix US Plant (Indiana): $3.9B investment, 2028 operational
Focus: Keep advanced nodes in-house. Reduces TSMC dependency.
This is part of a comprehensive analysis. Read the full analysis on The Business Engineer.
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Source: Advanced Packaging (CoWoS): TSMC’s Chip-on-Wafer-on-Substrate Technology
